Cybercriminals Exploit Residential Proxies to Mask Attacks

Key Takeaways

• Cybercriminals are increasingly leveraging residential proxy networks to conceal their malicious activities, routing traffic through legitimate home internet connections.
• A report by Infoblox revealed that over 65% of their cloud customers exhibited connections to residential proxy services, indicating widespread adoption.
• The volume of DNS queries to proxy-related domains surged from approximately 300 billion per month in early 2025 to over 500 billion by April 2026.
• Detecting these connections is challenging as they mimic genuine user traffic, making traditional IP reputation systems less effective.
• Organizations must implement Protective DNS and audit DNS logs to identify and block connections to known proxy orchestration domains.

Cybersecurity professionals face an escalating challenge in tracking and neutralizing threat actors, primarily due to the widespread adoption of residential proxy networks. These services enable attackers to funnel harmful traffic through typical household internet connections, effectively cloaking their origins and making their activities appear as legitimate user behavior rather than originating from a malicious server.

The proliferation of this technique is overwhelming security teams. Residential proxies operate by directing internet traffic through actual consumer devices, including home routers, mobile phones, and various IoT gadgets. This method distinguishes them from commercial VPNs, which often signal their presence to target destinations. Residential proxies, conversely, make traffic seem as if it originates from an authentic home user, rendering them exceptionally difficult to detect and inherently dangerous.

Deep Dive into Residential Proxy Prevalence

Researchers at Infoblox conducted an extensive analysis of residential proxies across their cloud customer networks, uncovering alarming statistics. According to a report shared with Cyber Security News (CSN), more than 65% of Infoblox’s cloud customer base was found to be connecting to residential proxy services. This pervasive usage points to a significant blind spot in enterprise security.

The scale of the issue is underscored by the dramatic increase in DNS traffic associated with proxy-related domains. Infoblox observed a surge from roughly 300 billion queries per month in early 2025 to exceeding 500 billion queries per month by April 2026. This exponential growth surprised even seasoned analysts, demonstrating the rapid expansion of these networks.

Residential proxy traffic was evident across all examined industry verticals, with at least 40% of customers in every sector showing exposure. Industries such as pharmaceutical, food and beverage, electronics, industrial, and healthcare all registered substantial proxy usage. This widespread adoption raises critical questions about the depth to which these services have infiltrated enterprise environments, often without the knowledge or consent of the organizations themselves.

Unintentional Enrollment and Blurry Lines

A complicating factor in this landscape is that not all residential proxy use is intentional. Many devices are unknowingly enrolled into these proxy networks. This often occurs through seemingly innocuous channels like free streaming applications, browser extensions, or software development kits (SDKs) bundled within popular consumer applications. The distinction between voluntary participation and silent exploitation is increasingly blurred, creating significant security vulnerabilities for defenders.

How Threat Actors Exploit Residential Proxies

Threat actors highly value residential proxies for their ability to provide a “clean” disguise for malicious traffic. Conventional IP reputation systems are primarily designed to flag datacenter IPs and other known threat sources. However, a home IP address from a legitimate Internet Service Provider (ISP) typically bypasses these checks without raising suspicion. This allows attackers to execute various nefarious activities, including credential stuffing, account takeovers, ad fraud, and reconnaissance, all while appearing to operate from a genuine household device.

One notable instance involved a service named Gress, which incentivizes users with cryptocurrency tokens for sharing unused bandwidth. Reports indicated that Gress was pre-installed on certain Android TV streaming devices, enrolling users into its proxy network without their explicit consent. Another service, Honeygain, compensates users for sharing their residential IP as a proxy exit point and also operates CrBuzz, a product that donates a portion of its revenue to charity.

Infoblox also documented a significant spike linked to a particular orchestration domain utilized by proxy networks. In January 2025, the number of customer networks querying this domain surged by over 250% in a single day—an anomaly that even experts in the proxy space found difficult to explain. This sudden increase closely followed enforcement actions against IPIDEA, a major proxy service, suggesting that displaced traffic rapidly migrated to other providers.

Why Detection is Difficult and What Organizations Can Do

The inherent design of residential proxy traffic makes its detection exceptionally challenging. Since traffic originates from real home IP addresses associated with legitimate ISPs, conventional blocklists and geolocation filters offer limited efficacy. Furthermore, content filtering policies are often inconsistently applied, as the treatment of malicious domains can vary significantly based on an organization’s specific security configurations.

Infoblox advises that organizations implement Protective DNS solutions to block queries directed at known proxy orchestration domains. These domains function similarly to command-and-control infrastructure in traditional malware campaigns. Security teams should also diligently audit DNS query logs for traffic to identified proxy domains and meticulously review browser extensions and consumer applications on corporate devices for any embedded proxy SDKs.

Regularly cross-referencing IP addresses against external resources that track residential proxy usage can help uncover exposure that might otherwise go unnoticed. Residential proxies are no longer specialized tools confined to a small group of advanced threat actors. They have become deeply integrated into everyday applications used by millions. Organizations that fail to address this evolving risk face a substantial and growing gap in their defensive posture.

What You Should Do

• Deploy Protective DNS: Implement solutions that block DNS queries to known proxy orchestration domains, treating them as critical threat indicators.
• Audit DNS Query Logs: Regularly review DNS logs for connections to identified residential proxy domains and unusual traffic patterns.
• Inspect Corporate Devices: Conduct audits of browser extensions and consumer applications on corporate endpoints to identify any embedded proxy SDKs.
• Utilize External IP Reputation Services: Integrate external services that track residential proxy usage to cross-reference and identify potentially compromised IP addresses.
• Educate Users: Raise awareness among employees about the risks associated with installing unverified free applications or browser extensions.

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